Founder of Centra Tech Sentenced to Prison for ICO Scam

Robert Farkas, one of the founders of Centra Tech, was sentenced to one year and one day in prison for conducting an illegal ICO.

Farkas, along with co-defendants Sohrab Sharma and Raymond Trapani, founded Centra Tech in 2017 and offered investors a cryptocurrency debit card called the “Centra Card.” To finance the company, the three issued Centra tokens (CTR) through an initial coin offering (ICO), raising approximately $25 million dollars between July and October 2017.

The founders claimed that Centra Tech had a money transmitter license in 38 states and had formed partnerships with Bancorp, Visa, and Mastercard. An FBI investigation into the company showed that claims made to secure the ICO were all false. The company never established a partnership with any payment processor, had no money transmitter or other licenses, and even fabricated two key members of the company’s executive team.

In 2018, the Department of Justice and the FBI jointly seized 100,000 ether from the company. Earlier this year, the United States Marshals Service sold the seized cryptocurrencies for approximately $33.4 million, saying that the proceeds will be used to compensate the victims of the Centra Tech fraud.

Aside from receiving a one-year prison sentence, Farkas was also sentenced to three years of supervised release and ordered to forfeit $347,062 and a Rolex watch purchased with the fraud proceeds. According to the press release published by the U.S. Department of Justice on 15 December, Farkas had previously pled guilty to conspiring to commit securities and wire fraud.

Ilan Graff, a U.S. Attorney in charge of the case, said that the Department of Justice will continue to aggressively pursue frauds like this one.